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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Edgar Glimpses Via Acquire Media NewsEdge) THIRD QUARTER 2013 vs. THIRD QUARTER 2012
AND
YEAR-TO-DATE 2013 vs. YEAR-TO-DATE 2012OVERVIEW
Southern Company is a holding company that owns all of the common stock of the
traditional operating companies - Alabama Power, Georgia Power, Gulf Power, and
Mississippi Power - and Southern Power and other direct and indirect
subsidiaries. Discussion of the results of operations is focused on the Southern
Company system's primary business of electricity sales by the traditional
operating companies and Southern Power. The four traditional operating companies
are vertically integrated utilities providing electric service in four
Southeastern states. Southern Power constructs, acquires, owns, and manages
generation assets, including renewable energy projects, and sells electricity at
market-based rates in the wholesale market. Southern Company's other business
activities include investments in leveraged lease projects and
telecommunications. For additional information on these businesses, see BUSINESS
- The Southern Company System - "Traditional Operating Companies," "Southern
Power," and "Other Businesses" in Item 1 of the Form 10-K.

In addition, subsidiaries of Southern Company are constructing Plant Vogtle
Units 3 and 4 (45.7% ownership interest by Georgia Power in two units, each with
approximately 1,100 MWs) and the Kemper IGCC (in which Mississippi Power is
ultimately expected to hold an 85% ownership interest in the 582-MW facility).

Southern Company continues to focus on several key performance indicators. These
indicators include customer satisfaction, plant availability, system
reliability, and earnings per share. For additional information on these
indicators, see MANAGEMENT'S DISCUSSION AND ANALYSIS - OVERVIEW - "Key
Performance Indicators" of Southern Company in Item 7 of the Form 10-K. See
FUTURE EARNINGS POTENTIAL - "Other Matters" herein for information regarding an
explosion at Plant Bowen in April 2013 that has negatively impacted the Southern
Company system's 2013 actual performance on its peak season equivalent forced
outage rate, one of its key performance indicators, as compared to the target.

See also Note (B) to the Condensed Financial Statements under "Integrated Coal
Gasification Combined Cycle" herein for information regarding the revisions to
the cost estimate for the Kemper IGCC that have negatively impacted Southern
Company's earnings per share, one of its key performance indicators, for 2013,
as compared to the target.

RESULTS OF OPERATIONS
Net Income
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$(124) (12.7) $(737) (37.5)
Southern Company's third quarter 2013 net income after dividends on preferred
and preference stock of subsidiaries was $852 million ($0.97 per share) compared
to $976 million ($1.11 per share) for the third quarter 2012. The decrease was
primarily related to a $150 million pre-tax charge ($93 million after-tax) for a
revision of estimated costs expected to be incurred on Mississippi Power's
construction of the Kemper IGCC above the $2.88 billion cost cap established by
the Mississippi PSC, net of $245 million of grants awarded to the project by the
DOE under the
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Clean Coal Power Initiative Round 2 (DOE Grants) and the cost of the lignite
mine and equipment, the cost of the carbon dioxide pipeline facilities, AFUDC,
and certain general exceptions, including change of law, force majeure, and
beneficial capital (which exists when Mississippi Power demonstrates that the
purpose and effect of the construction cost increase is to produce efficiencies
that will result in a neutral or favorable effect on customers relative to the
original proposal for the CPCN) (Cost Cap Exceptions). Also contributing to the
decrease was a decrease in revenues due to less favorable weather in the third
quarter 2013 as compared to the corresponding period in 2012, partially offset
by an increase related to retail revenue rate effects at Georgia Power. In
addition, depreciation increased related to new generating plants in service and
operations and maintenance expenses increased.

Southern Company's year-to-date 2013 net income after dividends on preferred and
preference stock of subsidiaries was $1.2 billion ($1.41 per share) compared to
$2.0 billion ($2.26 per share) for year-to-date 2012. The decrease was primarily
related to $1.1 billion in pre-tax charges ($704 million after-tax) for
revisions of estimated costs expected to be incurred on Mississippi Power's
construction of the Kemper IGCC above the $2.88 billion cost cap established by
the Mississippi PSC, net of $245 million of DOE Grants and the Cost Cap
Exceptions.

Retail Revenues
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$(60) (1.4) $169 1.5
In the third quarter 2013, retail revenues were $4.3 billion compared to $4.4
billion for the corresponding period in 2012. For year-to-date 2013, retail
revenues were $11.2 billion compared to $11.1 billion for the corresponding
period in 2012.

Details of the changes in retail revenues were as follows:
Third Quarter Year-to-Date
2013 2013
(in millions) (% change) (in millions) (% change)
Retail - prior year $ 4,379 $ 11,068
Estimated change in -
Rates and pricing 34 0.8 139 1.2
Sales growth (decline) 9 0.2 (16 ) (0.1)
Weather (94 ) (2.2) (84 ) (0.8)
Fuel and other cost recovery (9 ) (0.2) 130 1.2
Retail - current year $ 4,319 (1.4)% $ 11,237 1.5%
Revenues associated with changes in rates and pricing increased in the third
quarter 2013 when compared to the corresponding period in 2012 primarily due to
base tariff increases at Georgia Power effective January 1, 2013, as approved by
the Georgia PSC, related to placing a new generating unit at Plant
McDonough-Atkinson in service and the financing costs related to the
construction of Plant Vogtle Units 3 and 4, partially offset by lower
contributions from market-driven rates from commercial and industrial customers.

Revenues associated with changes in rates and pricing increased for year-to-date
2013 when compared to the corresponding period in 2012 primarily due to base
tariff increases at Georgia Power effective April 2012 and January 1, 2013, as
approved by the Georgia PSC, related to placing new generating units at Plant
McDonough-Atkinson in service and the financing costs related to the
construction of Plant Vogtle Units 3 and 4, as well as higher contributions from
market-driven rates from commercial and industrial customers.

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Revenues attributable to changes in sales increased in the third quarter 2013
when compared to the corresponding period in 2012. The increase was due to a
2.6% increase in industrial KWH sales and a 1.1% increase in weather-adjusted
commercial KWH sales, partially offset by a 0.3% decrease in weather-adjusted
residential KWH sales. The increase in industrial KWH sales for the third
quarter 2013 was primarily due to increases in the paper, primary metals, and
stone, clay, and glass sectors, partially offset by decreases in the pipeline
and military sectors. The increase in weather-adjusted commercial KWH sales for
the third quarter 2013 was primarily due to increased customer usage and
customer growth. The decrease in weather-adjusted residential KWH sales for the
third quarter 2013 was primarily due to decreased customer usage, partially
offset by customer growth.

Revenues attributable to changes in sales decreased for year-to-date 2013 when
compared to the corresponding period in 2012. The decrease was due to a 0.5%
decrease in weather-adjusted residential KWH sales, partially offset by a 0.4%
increase in industrial KWH sales. Weather-adjusted commercial KWH sales were
flat. The decrease in weather-adjusted residential KWH sales for year-to-date
2013 was primarily due to decreased customer usage, partially offset by customer
growth. The increase in industrial KWH sales for year-to-date 2013 was primarily
due to increases in the primary metals, paper, and stone, clay, and glass
sectors, partially offset by decreases in the chemicals and military sectors.

In the first quarter 2012, Georgia Power began using new actual advanced meter
data to compute unbilled revenues. The year-to-date weather-adjusted KWH sales
variances shown above reflect an adjustment to the estimated allocation of
Georgia Power's unbilled January 2012 KWH sales among customer classes that is
consistent with the actual allocation in 2013. Without this adjustment,
year-to-date 2013 weather-adjusted residential KWH sales decreased 0.8% as
compared to the corresponding period in 2012 while weather-adjusted commercial
KWH sales increased 0.3% as compared to the corresponding period in 2012.

Fuel and other cost recovery revenues decreased $9 million in the third quarter
2013 when compared to the corresponding period in 2012 primarily due to an
increase in hydro generation resulting from greater rainfall. Fuel and other
cost recovery revenues increased $130 million for year-to-date 2013 when
compared to the corresponding period in 2012 primarily due to higher fuel costs,
partially offset by an increase in hydro generation resulting from greater
rainfall. Electric rates for the traditional operating companies include
provisions to adjust billings for fluctuations in fuel costs, including the
energy component of purchased power costs. Under these provisions, fuel revenues
generally equal fuel expenses, including the energy component of purchased power
costs, and do not affect net income. The traditional operating companies may
also have one or more regulatory mechanisms to recover other costs such as
environmental, storm damage, new plants, and PPAs.

Wholesale revenues from PPAs and unit power sales contracts have both capacity
and energy components. Capacity revenues reflect the recovery of fixed costs and
a return on investment. Energy revenues will vary depending on fuel prices, the
market prices of wholesale energy compared to the Southern Company system's
generation, demand for energy within the Southern Company system's service
territory, and the availability of the Southern Company system's generation.

Increases and decreases in energy revenues that are driven by fuel prices are
accompanied by an increase or decrease in fuel costs and do not have a
significant impact on net income. Short-term opportunity sales are made at
market-based rates that generally provide a margin above the Southern Company
system's variable cost to produce the energy.

In the third quarter 2013, wholesale revenues were $520 million compared to $497
million for the corresponding period in 2012, reflecting a $14 million increase
in capacity revenues and a $9 million increase in energy revenues. The increase
in capacity revenues was primarily due to an increase in capacity amounts under
existing PPAs. The increase in energy revenues was primarily related to an
increase in the average cost of natural gas, partially offset
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by a decrease in volume related to less favorable weather in the third quarter
2013 as compared to the corresponding period in 2012.

For year-to-date 2013, wholesale revenues were $1.4 billion compared to $1.3
billion for the corresponding period in 2012, reflecting an $86 million increase
in energy revenues and a $59 million increase in capacity revenues. The increase
in capacity revenues was primarily due to the commencement of a new PPA at
Southern Power's Plant Nacogdoches, which was placed in service in June 2012 and
an increase in capacity amounts under existing PPAs. The increase in energy
revenues was primarily related to an increase in the average cost of natural
gas, partially offset by a decrease in volume related to less favorable weather
in the third quarter 2013 as compared to the corresponding period in 2012.

Third Quarter 2012 Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
Fuel $ 27 1.7 $ 309 7.9
Purchased power (19 ) (11.6) (88 ) (19.3)
Total fuel and purchased
power expenses $ 8 $ 221
In the third quarter 2013, total fuel and purchased power expenses were $1.73
billion compared to $1.72 billion for the corresponding period in 2012. The
increase was primarily the result of an $86 million increase in the average cost
of fuel and purchased power primarily due to higher natural gas prices,
partially offset by a $63 million decrease in the volume of KWHs purchased and a
$15 million decrease in the volume of KWHs generated as a result of less
favorable weather compared to the corresponding period in 2012 reducing total
demand.

For year-to-date 2013, total fuel and purchased power expenses were $4.6 billion
compared to $4.4 billion for the corresponding period in 2012. The increase was
primarily the result of a $364 million increase in the average cost of fuel and
purchased power primarily due to higher natural gas prices and a $46 million
increase in the volume of KWHs generated, partially offset by a $189 million
decrease in the volume of KWHs purchased as a result of less favorable weather
compared to the corresponding period in 2012 reducing total demand.

Fuel and purchased power energy transactions at the traditional operating
companies are generally offset by fuel revenues and do not have a significant
impact on net income. See FUTURE EARNINGS POTENTIAL - "PSC Matters - Retail Fuel
Cost Recovery" herein for additional information. Fuel expenses incurred under
Southern Power's PPAs are generally the responsibility of the counterparties and
do not significantly impact net income.

Fuel
In the third quarter 2013, fuel expense was $1.58 billion compared to $1.55
billion for the corresponding period in 2012. The increase was primarily due to
an 11.2% increase in the average cost of natural gas per KWH generated,
partially offset by a 4.6% decrease in KWHs generated by natural gas and a
292.5% increase in the volume of KWHs generated by hydro facilities resulting
from greater rainfall.

For year-to-date 2013, fuel expense was $4.2 billion compared to $3.9 billion
for the corresponding period in 2012. The increase was primarily due to a 19.6%
increase in the average cost of natural gas per KWH generated, partially offset
by a 138.9% increase in the volume of KWHs generated by hydro facilities
resulting from greater rainfall.

Purchased Power
In the third quarter 2013, purchased power expense was $145 million compared to
$164 million for the corresponding period in 2012. The decrease was primarily
due to a 27.3% decrease in the volume of KWHs purchased as the marginal cost of
generation available was lower than the market cost of available energy,
partially offset by a 13.7% increase in the average cost per KWH purchased.

For year-to-date 2013, purchased power expense was $367 million compared to $455
million for the corresponding period in 2012. The decrease was primarily due to
a 31.5% decrease in the volume of KWHs purchased as the marginal cost of
generation available was lower than the market cost of available energy,
partially offset by a 20.8% increase in the average cost per KWH purchased.

Energy purchases will vary depending on demand for energy within the Southern
Company system's service territory, the market prices of wholesale energy as
compared to the cost of the Southern Company system's generation, and the
availability of the Southern Company system's generation.

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Other Operations and Maintenance Expenses
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$22 2.4 $32 1.1
In the third quarter 2013, other operations and maintenance expenses were $928
million compared to $906 million for the corresponding period in 2012. The
increase was primarily due to a $12 million increase in pension costs, a $12
million increase in transmission and distribution costs, and a $5 million
increase in customer service expenses, partially offset by a $9 million decrease
in other production expenses primarily related to outage and maintenance costs
and commodity and labor costs.

For year-to-date 2013, other operations and maintenance expenses were $2.85
billion compared to $2.82 billion for the corresponding period in 2012. The
increase was primarily the result of a $37 million increase in pension costs, a
$9 million increase in amortization of Alabama Power's nuclear outage expenses,
and a $9 million increase in transmission and distribution costs. These
increases were partially offset by a $16 million decrease in other production
expenses primarily related to outage and maintenance costs and commodity and
labor costs. See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS
POTENTIAL - "PSC Matters - Alabama Power - Nuclear Outage Accounting Order" of
Southern Company in Item 7 of the Form 10-K for additional information on the
amortization of Alabama Power's nuclear outage expenses.

See Note (F) to the Condensed Financial Statements herein for additional
information related to pension costs.

MC Asset Recovery Insurance Settlement
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in
(change in millions) (% change) millions) (% change)
$- - $19 N/M
N/M - Not meaningful
In the second quarter 2012, Southern Company received an insurance recovery
related to a litigation settlement with MC Asset Recovery, LLC, which resulted
in income of $19 million. See Note 3 to the financial statements of Southern
Company under "Insurance Recovery" in Item 8 of the Form 10-K for additional
information.

Depreciation and Amortization
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$31 6.9 $87 6.5
In the third quarter 2013, depreciation and amortization was $480 million
compared to $449 million for the corresponding period in 2012. The increase was
primarily due to additional plant in service related to the completion of
Georgia Power's Plant McDonough-Atkinson Unit 6 in October 2012 and Southern
Power's Plants Apex and Cleveland in July 2012 and December 2012, respectively,
certain unit retirement decisions (with respect to the portion of such units
dedicated to wholesale service) at Georgia Power, and additional transmission
and distribution projects.

For year-to-date 2013, depreciation and amortization was $1.4 billion compared
to $1.3 billion for the corresponding period in 2012. The increase was primarily
due to additional plant in service related to the completion of Georgia Power's
Plant McDonough-Atkinson Units 5 and 6 in April 2012 and October 2012,
respectively, and Southern Power's Plant Nacogdoches in June 2012, Plant Apex in
July 2012, and Plant Cleveland in December 2012, certain unit retirement
decisions (with respect to the portion of such units dedicated to wholesale
service) at Georgia Power, and additional transmission and distribution
projects. These increases were partially offset by a net reduction in
amortization primarily related to amortization of a regulatory liability for
state income
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tax credits at Georgia Power and by the deferral of certain expenses under an
accounting order at Alabama Power. See Note 1 to the financial statements of
Southern Company under "Regulatory Assets and Liabilities" in Item 8 of the Form
10-K for additional information on the state income tax credits regulatory
liability.

Taxes Other Than Income Taxes
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$6 2.5 $20 2.9
In the third quarter 2013, taxes other than income taxes were $243 million
compared to $237 million for the corresponding period in 2012. The increase was
the result of an increase in property taxes.

For year-to-date 2013, taxes other than income taxes were $710 million compared
to $690 million for the corresponding period in 2012. The increase was primarily
the result of increases in property taxes and municipal franchise fees.

Estimated Loss on Kemper IGCC
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$150 N/M $1,140 N/M
N/M - Not meaningful
In the third quarter 2013 and year-to-date 2013, estimated probable losses on
the Kemper IGCC of $150 million and $1.1 billion, respectively, were recorded at
Southern Company to reflect revisions of estimated costs expected to be incurred
on Mississippi Power's construction of the Kemper IGCC in excess of the $2.88
billion cost cap established by the Mississippi PSC, net of the DOE Grants and
the Cost Cap Exceptions. See FUTURE EARNINGS POTENTIAL - "Construction Program"
and Note (B) to the Condensed Financial Statements under "Integrated Coal
Gasification Combined Cycle" herein for additional information.

Allowance for Equity Funds Used During Construction
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$14 35.9 $37 36.3
In the third quarter 2013, AFUDC equity was $53 million compared to $39 million
for the corresponding period in 2012. For year-to-date 2013, AFUDC equity was
$139 million compared to $102 million for the corresponding period in 2012. The
increases were primarily due to an increase in CWIP related to Mississippi
Power's Kemper IGCC, partially offset by the completion of Georgia Power's Plant
McDonough-Atkinson Units 5 and 6 in April 2012 and October 2012, respectively.

Leveraged Lease Income (Loss)
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$- - $(27) N/M
N/M - Not meaningful
For year-to-date 2013, leveraged lease income (loss) was $(11) million compared
to $16 million for the corresponding period in 2012. The decrease was primarily
due to the restructuring of a leveraged lease investment. See Note (J) to the
Condensed Financial Statements herein for additional information.

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Interest Expense, Net of Amounts Capitalized
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$(16) (7.3) $(21) (3.2)
In the third quarter 2013, interest expense, net of amounts capitalized was $202
million compared to $218 million for the corresponding period in 2012. For
year-to-date 2013, interest expense, net of amounts capitalized was $628 million
compared to $649 million for the corresponding period in 2012. These decreases
were primarily due to lower interest rates, the timing of issuances and
redemptions of long term-debt, an increase in capitalized interest primarily
resulting from AFUDC debt associated with Mississippi Power's Kemper IGCC, and
an increase in capitalized interest associated with the construction of Southern
Power's Plants Campo Verde and Spectrum. For year-to-date 2013, these decreases
were partially offset by a decrease in capitalized interest resulting from the
completion of Southern Power's Plants Nacogdoches and Cleveland, a reduction in
AFUDC debt due to the completion of Georgia Power's Plant McDonough-Atkinson
Units 5 and 6, and the conclusion of certain state and federal tax audits in
2012.

Other Income (Expense), Net
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$(6) N/M $(16) N/M
N/M - Not meaningful
In the third quarter 2013, other income (expense), net was $(10) million
compared to $(4) million for the corresponding period in 2012. The change was
primarily related to charitable contributions, partially offset by gains on
sales of non-utility property at Alabama Power.

For year-to-date 2013, other income (expense), net was $(20) million compared to
$(4) million for the corresponding period in 2012. The change was primarily
related to the conclusion of certain federal income tax audits in 2012 and
charitable contributions, partially offset by gains on sales of non-utility
property at Alabama Power.

Income Taxes
Third Quarter 2013 vs. Third Quarter 2012 Year-to-Date 2013 vs. Year-to-Date 2012
(change in millions) (% change) (change in millions) (% change)
$(101) (17.8) $(441) (40.2)
In the third quarter 2013, income taxes were $468 million compared to $569
million for the corresponding period in 2012. The decrease was primarily due to
lower pre-tax earnings, an increase in tax benefits recognized from investment
tax credits (ITCs) at Southern Power, and a net increase in non-taxable AFUDC
equity.

For year-to-date 2013, income taxes were $657 million compared to $1.1 billion
for the corresponding period in 2012. The decrease was primarily due to lower
pre-tax earnings, a net increase in tax benefits recognized from ITCs, primarily
at Southern Power, and a net increase in non-taxable AFUDC equity, partially
offset by a decrease in state income tax credits, primarily at Georgia Power.

FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of
Southern Company's future earnings potential. The level of Southern Company's
future earnings depends on numerous factors that affect the opportunities,
challenges, and risks of the Southern Company system's primary business of
selling electricity. These factors include the traditional operating companies'
ability to maintain a constructive regulatory environment that continues to
allow for the timely recovery of prudently-incurred costs during a time of
increasing costs and the
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successful completion of ongoing construction projects, including construction
of generating facilities. Another major factor is the profitability of the
competitive wholesale supply business. Future earnings for the electricity
business in the near term will depend, in part, upon maintaining energy sales
which is subject to a number of factors. These factors include weather,
competition, new energy contracts with neighboring utilities and other wholesale
customers, energy conservation practiced by customers, the price of electricity,
the price elasticity of demand, and the rate of economic growth or decline in
the service territory. In addition, the level of future earnings for the
wholesale supply business also depends on numerous factors including
creditworthiness of customers, total generating capacity available and related
costs, future acquisitions and construction of generating facilities, and the
successful remarketing of capacity as current contracts expire. Changes in
regional and global economic conditions may impact sales for the traditional
operating companies and Southern Power as the pace of the economic recovery
remains uncertain. The timing and extent of the economic recovery will impact
growth and may impact future earnings. For additional information relating to
these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND
ANALYSIS - FUTURE EARNINGS POTENTIAL of Southern Company in Item 7 of the Form
10-K.

Environmental Matters
Compliance costs related to federal and state environmental statutes and
regulations could affect earnings if such costs cannot continue to be fully
recovered in rates on a timely basis. Environmental compliance spending over the
next several years may differ materially from the amounts estimated. The timing,
specific requirements, and estimated costs could change as environmental
statutes and regulations are adopted or modified. Further, higher costs that are
recovered through regulated rates could contribute to reduced demand for
electricity, which could negatively affect results of operations, cash flows,
and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE
EARNINGS POTENTIAL - "Environmental Matters" of Southern Company in Item 7 and
Note 3 to the financial statements of Southern Company under "Environmental
Matters" in Item 8 of the Form 10-K for additional information.

New Source Review Actions
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - New Source Review Actions" of Southern Company in Item
7 and Note 3 to the financial statements of Southern Company under
"Environmental Matters - New Source Review Actions" in Item 8 of the Form 10-K
for additional information. On September 19, 2013, a three-judge panel of the
U.S. Court of Appeals for the Eleventh Circuit affirmed in part and reversed in
part the 2011 judgment of the U.S. District Court for the Northern District of
Alabama in favor of Alabama Power, which was based on the exclusion of the
testimony of certain of the EPA's experts, and remanded the case back to the
U.S. District Court for the Northern District of Alabama for further
proceedings. On October 31, 2013, Alabama Power filed with the U.S. Court of
Appeals for the Eleventh Circuit a petition for rehearing. In February 2012, the
EPA filed a motion in the U.S. District Court for the Northern District of
Alabama seeking vacatur of the 2011 judgment and recusal of the judge in the
case involving Alabama Power (including claims related to the unit co-owned by
Mississippi Power), which remains pending. The ultimate outcome of these matters
cannot be determined at this time.

Climate Change Litigation
Kivalina Case
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Climate Change Litigation - Kivalina Case" of Southern
Company in Item 7 and Note 3 to the financial statements of Southern Company
under "Environmental Matters - Climate Change Litigation - Kivalina Case" in
Item 8 of the Form 10-K for additional information. On May 20, 2013, the U.S.

Supreme Court denied the plaintiffs' petition for review. The case is now
concluded.

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Hurricane Katrina Case
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Climate Change Litigation - Hurricane Katrina Case" of
Southern Company in Item 7 and Note 3 to the financial statements of Southern
Company under "Environmental Matters - Climate Change Litigation - Hurricane
Katrina Case" in Item 8 of the Form 10-K for additional information. On May 14,
2013, the U.S. Court of Appeals for the Fifth Circuit upheld the U.S. District
Court for the Southern District of Mississippi's dismissal of the case. The case
is now concluded.

Environmental Statutes and Regulations
Air Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Environmental Statutes and Regulations - Air Quality"
of Southern Company in Item 7 of the Form 10-K for additional information
regarding Alabama's State Implementation Plan requirements related to opacity,
the EPA's MATS rule, the 2007 State of Georgia Multi-Pollutant Rule, the Cross
State Air Pollution Rule, and the EPA's SO2 rule.

On March 6, 2013, the U.S. Court of Appeals for the Eleventh Circuit upheld the
EPA's 2008 approval of the State of Alabama's opacity requirements and vacated
the EPA's 2011 attempt to rescind its approval, thereby resolving Alabama
Power's appeal in Alabama Power's favor.

On April 24, 2013, the EPA published a final reconsideration rule addressing new
source standards within the MATS rule. Although the EPA had considered revisions
to the startup and shutdown provisions of the MATS rule, a final decision on
these provisions was deferred. The ultimate impact of this rulemaking will
depend on the outcome of any additional rulemaking and/or legal challenges and,
therefore, cannot be determined at this time.

On April 30, 2013, the State of Georgia finalized revisions to the 2007 State of
Georgia Multi-Pollutant Rule and a companion rule requiring a 95% reduction in
SO2 emissions from certain coal-fired generating units. The revisions modify the
compliance dates under those two rules for units yet to be controlled to
synchronize them with the MATS rule compliance deadline. The revisions also
allow natural gas to be used as a compliance alternative at Plant Yates. See
Note 3 to the financial statements of Southern Company under "Retail Regulatory
Matters - Georgia Power - Integrated Resource Plans" in Item 8 of the Form 10-K
and Note (B) to the Condensed Financial Statements under "Retail Regulatory
Matters - Georgia Power - Integrated Resource Plans" herein for additional
information regarding the conversion of Plant Yates Units 6 and 7.

On June 24, 2013, the U.S. Supreme Court issued an order granting petitions by
the EPA and other parties requesting review of the U.S. Court of Appeals for the
District of Columbia Circuit's decision to vacate and remand the Cross State Air
Pollution Rule to the EPA. The ultimate outcome of this matter cannot be
determined at this time.

On July 25, 2013, the EPA issued initial nonattainment area designations under
the one-hour National Ambient Air Quality Standard for SO2 based on ambient air
quality monitoring data. No areas within the Southern Company system's service
territory were designated as nonattainment under this rule. The EPA has deferred
designation of attainment and unclassifiable areas and may designate additional
areas as nonattainment in the future, which could include areas within the
Southern Company system's service territory. The ultimate outcome of this matter
cannot be determined at this time.

Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Environmental Statutes and Regulations - Water Quality"
of Southern Company in Item 7 of the Form 10-K for additional information
regarding the EPA's proposed revision of the current steam electric effluent
guidelines and rule for cooling water intake structures.

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On June 7, 2013, the EPA published a proposed rule which requests comments on a
range of potential regulatory options for addressing certain wastestreams from
steam electric power plants. These regulations could result in the installation
of additional controls at certain of the facilities of the traditional operating
companies and Southern Power, which could result in significant capital
expenditures and compliance costs that could affect future unit retirement and
replacement decisions.

On June 27, 2013, the EPA entered into an amended settlement agreement to extend
the deadline for issuing a final rule for cooling water intake structures until
November 4, 2013 and, on October 31, 2013, further extended the deadline until
November 20, 2013.

The ultimate impact of these proposed regulations will depend on the specific
requirements of the final rule and the outcome of any legal challenges and
cannot be determined at this time.

Coal Combustion Byproducts
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Environmental Statutes and Regulations - Coal
Combustion Byproducts" of Southern Company in Item 7 of the Form 10-K for
additional information regarding the EPA's proposed regulation of the management
and disposal of coal combustion byproducts. On September 30, 2013, the U.S.

District Court for the District of Columbia issued an order granting partial
summary judgment to the environmental groups and other parties, ruling that the
EPA has a statutory obligation to review and revise, as necessary, the federal
solid waste regulations applicable to coal combustion byproducts and, on October
29, 2013, directed the EPA to provide a proposed schedule to complete the
rulemaking. The impact of this order depends on further judicial and regulatory
action and, therefore, the ultimate outcome of this matter cannot be determined
at this time.

On September 20, 2013, the EPA proposed revised regulations to establish
standards of performance for greenhouse gas emissions from new fossil fuel-fired
steam electric generating units. A Presidential memorandum issued on June 25,
2013 also directed the EPA to propose standards, regulations, or guidelines for
addressing modified, reconstructed, and existing steam electric generating units
by June 1, 2014. The ultimate impact of these proposed regulations and
guidelines will depend on the scope and specific requirements of the proposed
and final rules and the outcome of any legal challenges.

Although the outcome of the proposed regulations and guidelines cannot be
determined at this time, additional restrictions on the Southern Company
system's greenhouse gas emissions at the federal or state level could result in
significant additional compliance costs, including capital expenditures. These
costs could affect future unit retirement and replacement decisions. Also,
additional compliance costs and costs related to unit retirements could affect
results of operations, cash flows, and financial condition if such costs are not
recovered through regulated rates or through market-based contracts. Further,
higher costs that are recovered through regulated rates could contribute to
reduced demand for electricity, which could negatively impact results of
operations, cash flows, and financial condition.

PSC Matters
Retail Fuel Cost Recovery
The traditional operating companies each have established fuel cost recovery
rates approved by their respective state PSCs. Fuel cost recovery revenues as
recorded on the financial statements are adjusted for differences in actual
recoverable fuel costs and amounts billed in current regulated rates.

Accordingly, any changes in the billing factor will not have a significant
effect on Southern Company's revenues or net income, but will affect cash flow.

The
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traditional operating companies continuously monitor their under or over
recovered fuel cost balances. The total over recovered fuel balance at Alabama
Power, Georgia Power, and Mississippi Power included on Southern Company's
Condensed Balance Sheets herein was approximately $178 million at September 30,
2013 compared to the total over recovered fuel balance at Georgia Power, Gulf
Power, and Mississippi Power at December 31, 2012 of approximately $303 million.

At September 30, 2013, Gulf Power had under recovered fuel costs included on
Southern Company's Condensed Balance Sheet herein of approximately $10 million.

At December 31, 2012, Alabama Power had under recovered fuel costs included on
Southern Company's Condensed Balance Sheet herein of approximately $4 million.

See Note 3 to the financial statements of Southern Company under "Retail
Regulatory Matters - Alabama Power - Energy Cost Recovery" and "Retail
Regulatory Matters - Georgia Power - Fuel Cost Recovery" in Item 8 of the Form
10-K for additional information.

Alabama Power
Rate RSE
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL - "PSC
Matters - Alabama Power - Rate RSE" of Southern Company in Item 7 and Note 3 to
the financial statements of Southern Company under "Retail Regulatory Matters -
Alabama Power - Rate RSE" in Item 8 of the Form 10-K for additional information
regarding Alabama Power's Rate Stabilization and Equalization (Rate RSE). In
May, June, and July 2013, the Alabama PSC held public proceedings regarding the
operation and utilization of Rate RSE. On August 13, 2013, the Alabama PSC voted
to issue a report on Rate RSE that found that Alabama Power's Rate RSE mechanism
continues to be just and reasonable to customers and Alabama Power, but
recommended Alabama Power modify Rate RSE as follows:
• Eliminate the provision of Rate RSE establishing an allowed range of ROE,
which is currently 13.0% to 14.5%, with an adjusting point of 13.75%.

• Replace these two provisions with a provision that establishes rates based
upon an allowed weighted cost of equity (WCE) range of 5.75% to 6.21%,
with an adjusting point of 5.98%. If calculated under the current Rate RSE
provisions, the resulting WCE would range from 5.85% to 6.53%, with an
adjusting point of 6.19%.

• Provide eligibility for a performance-based adder of seven basis points,
or 0.07%, to the WCE adjusting point if Alabama Power (i) has an "A"
credit rating equivalent with at least one of the recognized rating
agencies or (ii) is in the top one-third of a designated customer value
benchmark survey.

Substantially all other provisions of Rate RSE would remain unchanged.

On August 21, 2013, Alabama Power filed its consent to these recommendations
with the Alabama PSC. The changes are effective for calendar year 2014.

On August 13, 2013, the Alabama PSC approved Alabama Power's petition requesting
a revision to Rate CNP Environmental that allows recovery of costs related to
pre-2005 environmental assets currently being recovered through Rate RSE. The
revenue impact as a result of this revision is estimated to be $50 million in
2014; however, this petition was made in accordance with Alabama Power's
agreement with the Alabama PSC to develop a plan to keep Rate RSE and Rate CNP
Environmental factors unchanged in 2014. Any unrecovered amounts associated with
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2014 environmental compliance costs will be reflected in the 2015 Rate CNP
Environmental filing. See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS
POTENTIAL - "PSC Matters - Alabama Power - Rate RSE" in Item 7 and Note 3 to the
financial statements of Southern Company under "Retail Regulatory Matters -
Alabama Power - Rate RSE" in Item 8 of the Form 10-K for additional information.

At September 30, 2013, the NDR had an accumulated balance of $95 million as
compared to $103 million at December 31, 2012, which is included on Southern
Company's Condensed Balance Sheet herein under other regulatory liabilities,
deferred. The decrease in the NDR is a result of storm activity. The related
accruals are reflected as operations and maintenance expenses on Southern
Company's Condensed Statement of Income herein.

Non-Nuclear Outage Accounting Order
On August 13, 2013, the Alabama PSC approved Alabama Power's petition requesting
authorization to defer to a regulatory asset account certain operations and
maintenance expenses associated with planned outages at non-nuclear generation
facilities in 2014 and to amortize those expenses over a three-year period
beginning in 2015. The 2014 outage expenditures to be deferred and amortized are
estimated to total approximately $70 million. This petition was made in
accordance with Alabama Power's agreement with the Alabama PSC to develop a plan
to keep Rate RSE factors unchanged in 2014. See MANAGEMENT'S DISCUSSION AND
ANALYSIS - FUTURE EARNINGS POTENTIAL - "PSC Matters - Alabama Power - Rate RSE"
in Item 7 and Note 3 to the financial statements of Southern Company under
"Retail Regulatory Matters - Alabama Power - Rate RSE" in Item 8 of the Form
10-K for additional information.

Georgia Power
Rate Plans
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL - "PSC
Matters - Georgia Power - Rate Plans" of Southern Company in Item 7 of the Form
10-K and Note 3 to the financial statements of Southern Company under "Retail
Regulatory Matters - Georgia Power - Rate Plans" in Item 8 of the Form 10-K for
information regarding Georgia Power's current retail rate plan.

In accordance with the 2010 ARP, Georgia Power filed a base rate case with the
Georgia PSC on June 28, 2013 (2013 Rate Case). The filing includes a requested
rate increase totaling $482 million, or 6.1% of retail revenues, to be effective
January 1, 2014 based on a proposed retail ROE of 11.50%. The requested increase
will be recovered through Georgia Power's existing base rate tariffs as follows:
$334 million through the traditional base rate tariffs, $132 million through the
Environmental Compliance Cost Recovery (ECCR) tariff, $5 million through the
Demand Side Management tariffs, and $11 million through the Municipal Franchise
Fee tariff. The filing reflects revenue requirements that have been levelized
over the three-year period ending December 31, 2016 to provide stable rates to
customers during a period of rising costs. The request was made to allow Georgia
Power to recover the costs of recent and future investments in infrastructure
including environmental controls, transmission and distribution, generation, and
smart grid technologies in order to maintain high levels of reliability and
superior customer service.

The primary points of the 2013 Rate Case are:
• Continuation of the traditional base rate tariffs through December 31,
2016 based on a test year ending July 31, 2014 with a modification for an
appropriate three-year levelization adjustment.

• Continuation of the ECCR tariff through December 31, 2016 with a
modification for an appropriate three-year levelization adjustment.

• Continuation of an allowed retail ROE range of 10.25% to 12.25%.

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• Continuation of the process whereby two-thirds of any earnings above the
top of the allowed ROE range will be shared with Georgia Power's customers
and the remaining one-third will be retained by Georgia Power.

• Continuation of the option to file an Interim Cost Recovery tariff in the
event earnings are projected to fall below the bottom of the ROE range
during the three-year term of the plan.

Hearings on Georgia Power's testimony were held in October 2013. In testimony
filed on October 18, 2013 and October 22, 2013, the Georgia PSC Staff proposed
various adjustments based on a traditional one-year test period and a 10.0% ROE
that would result in excess revenues of $165 million. However, the Georgia PSC
Staff also proposed no change to Georgia Power's current retail base rates
through 2014. The excess earnings in 2014 would be used to reduce rate increases
in 2015 and 2016. The Georgia PSC Staff further proposed reducing the allowed
ROE range to 50 basis points above and below the authorized ROE with one-third
of any earnings above the range used to reduce future ECCR tariff increases and
the remaining two-thirds applied to rate reductions. Georgia Power disagrees
with the Georgia PSC Staff's positions. Hearings on the Georgia PSC Staff and
intervenor testimony and Georgia Power's rebuttal hearings will be held in
November 2013.

The Georgia PSC is scheduled to issue a final order in this matter in December
2013. The ultimate outcome of this matter cannot be determined at this time.

Integrated Resource Plans
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Environmental Matters - Environmental Statutes and Regulations - Air Quality,"
" - Water Quality," and " - Coal Combustion Byproducts" of Southern Company in
Item 7 and Note 3 to the financial statements of Southern Company under "Retail
Regulatory Matters - Georgia Power - Rate Plans" and " - Integrated Resource
Plans" in Item 8 of the Form 10-K for additional information regarding proposed
and final EPA rules and regulations, including the MATS rule for coal- and
oil-fired electric utility steam generating units, proposed cooling water intake
structure rules, revisions to effluent guidelines for steam electric power
plants, and additional regulation of coal combustion byproducts; the State of
Georgia's Multi-Pollutant Rule; Georgia Power's analysis of the potential costs
and benefits of installing the required controls on its fossil generating units
in light of these regulations; the 2010 ARP; the 2011 IRP; and the 2013 IRP.

On April 17, 2013, the Georgia PSC approved the decertification of Plant Bowen
Unit 6 (32 MWs), which was retired on April 25, 2013. On September 30, 2013,
Plant Branch Unit 2 (319 MWs) was retired as approved by the Georgia PSC in the
2011 IRP in order to comply with the State of Georgia's Multi-Pollutant Rule.

On July 11, 2013, the Georgia PSC approved Georgia Power's request to decertify
and retire Plant Boulevard Units 2 and 3 (28 MWs) effective July 17, 2013. Plant
Branch Units 3 and 4 (1,016 MWs), Plant Yates Units 1 through 5 (579 MWs), and
Plant McManus Units 1 and 2 (122 MWs) will be decertified and retired by April
16, 2015, the compliance date of the MATS rule. The decertification date of
Plant Branch Unit 1 was extended from December 31, 2013 as specified in the
final order in the 2011 IRP to coincide with the decertification date of Plant
Branch Units 3 and 4. The decertification and retirement of Plant Kraft Units 1
through 4 (316 MWs) was also approved and will be effective by April 16, 2016,
based on a one-year extension of the MATS rule compliance date that was approved
by the State of Georgia Environmental Protection Division on September 10, 2013
to allow for necessary transmission system reliability improvements.

Additionally, the Georgia PSC approved Georgia Power's proposed MATS rule
compliance plan for emissions controls necessary for the continued operation of
Plants Bowen Units 1 through 4, Wansley Units 1 and 2, Scherer Units 1 through
3, and Hammond Units 1 through 4, the switch to natural gas as the primary fuel
at Plants Yates Units 6 and 7 and SEGCO's Plant Gaston Units 1 through 4, as
well as the fuel switch at Plant McIntosh Unit 1 to operate on Powder River
Basin coal.

The Georgia PSC also deferred decisions regarding the appropriate recovery
periods for the net book values of Plant Branch Units 3 and 4 and Plant
Boulevard Units 2 and 3, deferred environmental construction work in progress
for Plant Branch Units 3 and 4 and Plant Yates Units 6 and 7, costs associated
with unusable material and supplies, and
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any over or under recovered cost of removal balances remaining at the unit
retirement dates for each retirement unit until the 2013 Rate Case. The Georgia
PSC also deferred decisions regarding the recovery of any fuel related costs
that could be incurred in connection with the retirement units to be addressed
in future fuel cases.

The Georgia PSC also approved an additional 525 MWs of solar generation to be
purchased by Georgia Power. The 525 MWs will be subdivided into 425 MWs of
utility scale projects and 100 MWs of distributed generation. The 425 MWs of the
utility scale projects will be purchased through a competitive request for
proposal process which will be open to all qualified market participants,
including Georgia Power and its affiliates. The purchases resulting from both
programs will be for energy only and recovered through Georgia Power's fuel cost
recovery mechanism.

The decertification of these units, fuel conversions, and procurement of
additional solar generation are not expected to have a material impact on
Southern Company's financial statements; however, the ultimate outcome depends
on the Georgia PSC's order in the 2013 Rate Case and future fuel cases and
cannot be determined at this time.

On April 22, 2013, Georgia Power executed two PPAs to purchase energy from two
wind farms in Oklahoma with capacity totaling 250 MWs that will commence in 2016
and end in 2035, and subsequently has requested Georgia PSC approval. During
2013, Georgia Power has executed four PPAs to purchase a total of 169 MWs of
biomass capacity and energy from four facilities in Georgia that will commence
in 2015 and end in 2035. On May 21, 2013, the Georgia PSC approved two of the
biomass PPAs. The two wind PPAs and the two Georgia PSC-approved biomass PPAs
result in contractual obligations of approximately $13 million in 2015, $47
million in 2016, $49 million in 2017, and $1.29 billion thereafter. If approved
by the Georgia PSC, the additional biomass PPAs will result in contractual
obligations of approximately $1 million in 2015, $11 million in 2016, $12
million in 2017, and $249 million thereafter. The four biomass PPAs are
contingent upon the counterparty meeting specified contract dates for posting
collateral and commercial operation.

Income Tax Matters
Bonus Depreciation
In 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (Tax Relief Act) was signed into law. Major tax incentives
in the Tax Relief Act include 100% bonus depreciation for property placed in
service after September 8, 2010 and through 2011 (and for certain long-term
production-period projects placed in service in 2012) and 50% bonus depreciation
for property placed in service in 2012 (and for certain long-term
production-period projects to be placed in service in 2013), which will have a
positive impact on the future cash flows of Southern Company through 2013.

On January 2, 2013, the American Taxpayer Relief Act of 2012 (ATRA) was signed
into law. The ATRA retroactively extended several tax credits through 2013 and
extended 50% bonus depreciation for property to be placed in service in 2013
(and for certain long-term production-period projects to be placed in service in
2014). The extension of 50% bonus depreciation will have a positive impact on
the future cash flows of Southern Company through 2014.

Consequently, Southern Company's positive cash flow benefit is estimated to be
between $490 million and $540 million in 2013.

Construction Program
The subsidiary companies of Southern Company are engaged in continuous
construction programs to accommodate existing and estimated future loads on
their respective systems. The Southern Company system intends to continue its
strategy of developing and constructing new generating facilities, including the
ongoing construction of Plant Vogtle Units 3 and 4 at Georgia Power, the Kemper
IGCC at Mississippi Power, and solar units at Southern Power, as well as adding
or changing fuel sources for certain existing units, adding environmental
control equipment, and expanding the transmission and distribution systems. For
the traditional operating companies, major generation construction projects are
subject to state PSC approvals in order to be included in retail rates. While
Southern Power generally constructs and acquires generation assets covered by
long-term PPAs, any uncontracted capacity could negatively affect future
earnings.

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The two largest construction projects currently underway in the Southern Company
system are Plant Vogtle Units 3 and 4 (45.7% ownership interest by Georgia Power
in two units, each with approximately 1,100 MWs) and the Kemper IGCC (in which
Mississippi Power is ultimately expected to hold an 85% ownership interest in
the 582-MW facility). See FINANCIAL CONDITION AND LIQUIDITY - "Capital
Requirements and Contractual Obligations" herein for the cost estimate of the
Southern Company system's construction program, which includes the current
construction cost estimate to complete the Kemper IGCC. Also see Note 3 to the
financial statements of Southern Company under "Retail Regulatory Matters -
Georgia Power - Nuclear Construction" and "Integrated Coal Gasification Combined
Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial
Statements under "Retail Regulatory Matters - Georgia Power - Nuclear
Construction" and "Integrated Coal Gasification Combined Cycle" herein for
additional information.

Investments in Leveraged Leases
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL -
"Investments in Leveraged Leases" of Southern Company in Item 7 and Note 1 to
the financial statements of Southern Company under "Leveraged Leases" in Item 8
of the Form 10-K for additional information.

On March 1, 2013, Southern Company completed the restructuring of the
nonrecourse debt and the related rental payments associated with its leveraged
lease investment in a 440-MW generation facility located in Choctaw County,
Mississippi. In connection with the restructuring, Southern Company has
committed, as owner/lessor, to invest approximately $60 million in capital
through 2015 to improve the operational performance of the facility and upgrade
environmental controls. As part of the restructuring, the interest rate on the
nonrecourse debt was significantly reduced, resulting in lower debt payments for
Southern Company and lower rental payments for the lessee over the remaining
19-year term of the nonrecourse debt and the lease. As a consequence of the
restructuring, Southern Company recalculated its net investment in the lease to
reflect changes in the future cash flows to Southern Company as owner/lessor. As
a result of the recalculation, Southern Company recorded an after-tax charge to
income during the first quarter 2013 of approximately $16 million. This noncash
charge reflects a reallocation of previously recognized lease income that will
be reflected in income over the remaining term of the lease.

Nuclear Decommissioning
See Note 1 to the financial statements of Southern Company under "Nuclear
Decommissioning" in Item 8 of the Form 10-K and Note (A) to the Condensed
Financial Statements under "Nuclear Decommissioning" and "Asset Retirement
Obligations" herein for additional information. In September 2013, Alabama Power
received a 2013 decommissioning cost site study for Plant Farley. The estimated
cost of decommissioning based on the study resulted in an increase in the asset
retirement obligation liability of approximately $102 million.

Other Matters
Southern Company and its subsidiaries are involved in various other matters
being litigated and regulatory matters that could affect future earnings. In
addition, Southern Company and its subsidiaries are subject to certain claims
and legal actions arising in the ordinary course of business. The business
activities of Southern Company's subsidiaries are subject to extensive
governmental regulation related to public health and the environment, such as
regulation of air emissions and water discharges. Litigation over environmental
issues and claims of various types, including property damage, personal injury,
common law nuisance, and citizen enforcement of environmental requirements, such
as air quality and water standards, has increased generally throughout the U.S.

In particular, personal injury, property damage, and other claims for damages
alleged to have been caused by carbon dioxide and other emissions, coal
combustion byproducts, and alleged exposure to hazardous materials, and/or
requests for injunctive relief in connection with such matters, have become more
frequent.

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The ultimate outcome of such pending or potential litigation against Southern
Company and its subsidiaries cannot be predicted at this time; however, for
current proceedings not specifically reported in Note (B) to the Condensed
Financial Statements herein or in Note 3 to the financial statements of Southern
Company in Item 8 of the Form 10-K, management does not anticipate that the
ultimate liabilities, if any, arising from such current proceedings would have a
material effect on Southern Company's financial statements.

See the Notes to the Condensed Financial Statements herein for a discussion of
various other contingencies, regulatory matters, and other matters being
litigated which may affect future earnings potential.

See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL - "Other
Matters" of Southern Company in Item 7 of the Form 10-K for additional
information regarding the NRC's performance of additional operational and safety
reviews of nuclear facilities in the U.S. following the major earthquake and
tsunami that struck Japan in 2011. On March 19, 2013 and June 6, 2013, the NRC
issued orders relating to hardened vents for certain classes of containment
structures, including the ones in use at Plant Hatch. Southern Company is
continuing to analyze the impact of these orders. The ultimate outcome of this
matter cannot be determined at this time; however, management does not currently
anticipate that the compliance costs associated with these orders would have a
material impact on Southern Company's financial statements.

On April 4, 2013, an explosion occurred at Plant Bowen Unit 2 that resulted in
substantial damage to the Plant Bowen Unit 2 generator, Plant Bowen's Units 1
and 2 control room and surrounding areas, as well as Plant Bowen's switchyard.

Plant Bowen Unit 1 (approximately 700 MWs) was returned to service on August 4,
2013. Plant Bowen Unit 2 (approximately 700 MWs) remains offline pending
completion of the repairs. Georgia Power expects that any material repair costs
related to the damage will be covered by property insurance. The ultimate
outcome of this matter cannot be determined at this time.

ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Southern Company prepares its consolidated financial statements in accordance
with GAAP. Significant accounting policies are described in Note 1 to the
financial statements of Southern Company in Item 8 of the Form 10-K. In the
application of these policies, certain estimates are made that may have a
material impact on Southern Company's results of operations and related
disclosures. Different assumptions and measurements could produce estimates that
are significantly different from those recorded in the financial statements. See
MANAGEMENT'S DISCUSSION AND ANALYSIS - ACCOUNTING POLICIES - "Application of
Critical Accounting Policies and Estimates" of Southern Company in Item 7 of the
Form 10-K for a complete discussion of Southern Company's critical accounting
policies and estimates related to Electric Utility Regulation, Contingent
Obligations, and Pension and Other Postretirement Benefits.

Kemper IGCC Estimated Construction Costs, Project Completion Date, and Rate
Recovery
Mississippi Power has extended the scheduled in-service date for the Kemper IGCC
to the fourth quarter 2014 and revised its cost estimate to complete
construction to an amount that exceeds the $2.88 billion cost cap, net of the
DOE Grants and the Cost Cap Exceptions. Mississippi Power does not intend to
seek any joint owner contributions or rate recovery for any costs related to the
construction of the Kemper IGCC that exceed the $2.88 billion cost cap,
excluding the Cost Cap Exceptions and net of the DOE Grants. As a result of the
revisions to the cost estimate, Southern Company recorded pretax charges of $540
million, $450 million, and $150 million in the first, second, and third quarters
of 2013, respectively. In subsequent periods, any further changes in the
estimated costs to complete construction of the Kemper IGCC subject to the $2.88
billion cost cap will be reflected in Southern Company's statements of income
and these changes could be material. Mississippi Power could experience further
construction cost increases and/or schedule extensions with respect to the
Kemper IGCC as a result of factors including, but not limited to, labor costs
and productivity, adverse weather conditions, shortages and inconsistent quality
of equipment, materials, and labor, or contractor or supplier delay or
non-performance under construction or other agreements. Furthermore, Mississippi
Power could also experience further schedule extensions associated with
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start-up activities for this "first-of-a-kind" technology, including major
equipment failure, system integration, and operations, and/or unforeseen
engineering problems, which would result in further cost increases.

Given the significant judgment involved in estimating the future costs to
complete construction, the project completion date, the ultimate rate recovery
for the Kemper IGCC, and the potential impact on Southern Company's results of
operations, Southern Company considers these items to be critical accounting
estimates. See MANAGEMENT'S DISCUSSION AND ANALYSIS - FUTURE EARNINGS POTENTIAL
- "Construction Program" of Southern Company in Item 7 of the Form 10-K, Note 3
to the financial statements of Southern Company under "Integrated Coal
Gasification Combined Cycle" in Item 8 of the Form 10-K, and Note (B) to the
Condensed Financial Statements under "Integrated Coal Gasification Combined
Cycle" herein for additional information.

FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FINANCIAL CONDITION AND LIQUIDITY -
"Overview" of Southern Company in Item 7 of the Form 10-K for additional
information. Although earnings for the nine months ended September 30, 2013 were
negatively affected by the estimated probable losses relating to the Kemper
IGCC, Southern Company's financial condition remained stable at September 30,
2013. These charges for the nine months ended September 30, 2013 have resulted
in cash expenditures of $57 million with no recovery as of September 30, 2013
and are expected to result in future cash expenditures of $1.1 billion with no
recovery. Southern Company intends to continue to monitor its access to
short-term and long-term capital markets as well as its bank credit arrangements
to meet future capital and liquidity needs. See "Capital Requirements and
Contractual Obligations," "Sources of Capital," and "Financing Activities"
herein for additional information.

Net cash provided from operating activities totaled $4.4 billion for the first
nine months of 2013, an increase of $367 million from the corresponding period
in 2012. The increase in net cash provided from operating activities was
primarily due to a reduction in fossil fuel stock. Net cash used for investing
activities totaled $4.1 billion for the first nine months of 2013 primarily due
to property additions to utility plant. Net cash used for financing activities
totaled $255 million for the first nine months of 2013. This was primarily due
to redemptions of long-term debt and payments of common stock dividends,
partially offset by issuances of long-term debt and common stock. Fluctuations
in cash flow from financing activities vary from year to year based on capital
needs and the maturity or redemption of securities.

Significant balance sheet changes for the first nine months of 2013 include an
increase of $1.8 billion in total property, plant, and equipment for
construction of generation, transmission, and distribution facilities and a $1.8
billion increase in long-term debt (excluding amounts due within a year) to
repay maturing debt and to fund the Southern Company subsidiaries' continuous
construction programs.

The market price of Southern Company's common stock at the end of the third
quarter 2013 was $41.18 per share (based on the closing price as reported on the
New York Stock Exchange) and the book value was $21.30 per share, representing a
market-to-book ratio of 193%, compared to $42.81, $21.09, and 203%,
respectively, at the end of 2012. The dividend for the third quarter 2013 was
$0.5075 per share compared to $0.49 per share in the third quarter 2012.

Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS - FINANCIAL CONDITION AND LIQUIDITY -
"Capital Requirements and Contractual Obligations" of Southern Company in Item 7
of the Form 10-K for a description of Southern Company's capital requirements
for the construction programs of the Southern Company system, including
estimated capital expenditures for new generating facilities and to comply with
existing environmental statutes and regulations, and other funding requirements
associated with scheduled maturities of long-term debt, as well as the related
interest, preferred and preference stock dividends, leases, trust funding
requirements, other purchase commitments, unrecognized tax benefits and
interest, and derivative obligations.

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Approximately $1.3 billion will be required through September 30, 2014 to fund
maturities and announced redemptions of long-term debt. See FUTURE EARNINGS
POTENTIAL - "Environmental Matters - Environmental Statutes and Regulations"
herein for additional information.

The Southern Company system's construction program is estimated to be $6.6
billion for 2013, $6.1 billion for 2014, and $5.2 billion for 2015. Included in
these estimated amounts are expenditures related to construction of the Kemper
IGCC of $1.6 billion in 2013 and $260 million in 2014, which is net of SMEPA's
15% proposed ownership share of the Kemper IGCC, which reflects costs of
approximately $545 million in 2014. The estimated share for SMEPA reflects
estimated construction costs relating to SMEPA's proposed ownership interest
(including construction costs for all prior years relating to its proposed
ownership interest).

Southern Company anticipates that the Southern Company system's capital
expenditure requirements will continue to decline through the middle of the
decade, before rising again to meet additional requirements for environmental
compliance and new generation.

The construction programs are subject to periodic review and revision, and
actual construction costs may vary from these estimates because of numerous
factors. These factors include: changes in business conditions; changes in load
projections; changes in the expected environmental compliance program; changes
in environmental statutes and regulations; the outcome of any legal challenges
to the environmental rules; changes in generating plants, including unit
retirements and replacements and adding or changing fuel sources at existing
units, to meet regulatory requirements; changes in FERC rules and regulations;
PSC approvals; changes in legislation; the cost and efficiency of construction
labor, equipment, and materials; project scope and design changes; storm
impacts; and the cost of capital. In addition, there can be no assurance that
costs related to capital expenditures will be fully recovered. See Note 3 to the
financial statements of Southern Company under "Retail Regulatory Matters -
Georgia Power - Nuclear Construction" and "Integrated Coal Gasification Combined
Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial
Statements under "PSC Matters - Georgia Power - Nuclear Construction" and
"Integrated Coal Gasification Combined Cycle" herein for additional information.

Sources of Capital
Southern Company intends to meet its future capital needs through internal cash
flow and external security issuances. Equity capital can be provided from any
combination of Southern Company's stock plans, private placements, or public
offerings. The amount and timing of additional equity capital to be raised in
2013, as well as in subsequent years, will be contingent on Southern Company's
investment opportunities and capital requirements.

Except as described herein, the traditional operating companies and Southern
Power plan to obtain the funds required for construction and other purposes from
sources similar to those used in the past, which were primarily from operating
cash flows, security issuances, term loans, short-term borrowings, and equity
contributions from Southern Company. However, the amount, type, and timing of
any future financings, if needed, will depend upon prevailing market conditions,
regulatory approval, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS
- FINANCIAL CONDITION AND LIQUIDITY - "Sources of Capital" of Southern Company
in Item 7 of the Form 10-K for additional information.

In 2010, Georgia Power reached an agreement with the DOE to accept terms for a
conditional commitment for federal loan guarantees that would apply to future
Georgia Power borrowings related to the construction of Plant Vogtle Units 3 and
4. Any borrowings guaranteed by the DOE would be full recourse to Georgia Power
and secured by a first priority lien on Georgia Power's 45.7% undivided
ownership interest in Plant Vogtle Units 3 and 4. Total guaranteed borrowings
would not exceed the lesser of 70% of eligible project costs or approximately
$3.46 billion and are expected to be funded by the Federal Financing Bank. Final
approval and issuance of loan guarantees by the DOE are subject to negotiation
of definitive agreements, completion of due diligence by the DOE, and
satisfaction of other conditions. In the event that the DOE does not issue a
loan guarantee or Georgia Power determines that the final terms and conditions
of the loan guarantee by the DOE are not in the best interest of its customers,
Georgia Power expects to finance the construction of Plant Vogtle Units 3 and 4
through traditional capital markets. There can be no assurance that the DOE will
issue loan guarantees for Georgia Power. The conditional commitment will
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expire on December 31, 2013, unless further extended by the DOE. See Note (B) to
the Condensed Financial Statements under "Retail Regulatory Matters - Georgia
Power - Nuclear Construction" herein for additional information regarding Plant
Vogtle Units 3 and 4.

Mississippi Power has received DOE Grants of $245 million that have been used
for the construction of the Kemper IGCC. An additional $25 million in DOE Grants
is expected to be received for the initial operation of the Kemper IGCC. See
Note (B) to the Condensed Financial Statements under "Integrated Coal
Gasification Combined Cycle" herein for information regarding legislation
related to the securitization of certain costs of the Kemper IGCC.

Southern Company's current liabilities frequently exceed current assets because
of the continued use of short-term debt as a funding source to meet scheduled
maturities of long-term debt, as well as cash needs, which can fluctuate
significantly due to the seasonality of the business of the Southern Company
system. To meet short-term cash needs and contingencies, Southern Company has
substantial cash flow from operating activities and access to capital markets,
including commercial paper programs which are backed by bank credit facilities.

See Note 6 to the financial statements of Southern Company under "Bank Credit
Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial
Statements under "Bank Credit Arrangements" herein for additional information.

A portion of the unused credit with banks is allocated to provide liquidity
support to the traditional operating companies' variable rate pollution control
revenue bonds and commercial paper programs. The amount of variable rate
pollution control revenue bonds outstanding requiring liquidity support as of
September 30, 2013 was approximately $1.8 billion. In addition, at September 30,
2013, the traditional operating companies had $455 million of fixed rate
pollution control revenue bonds that will be required to be remarketed within
the next 12 months.

As reflected in the table above, during the first nine months of 2013, Southern
Company and certain of its subsidiaries entered into, amended, or renewed
certain of their credit arrangements. In February 2013, Southern Company,
Alabama Power, Georgia Power, and Southern Power each amended their multi-year
credit arrangements, which extended the maturity dates from 2016 to 2018. In
March 2013, Gulf Power and Mississippi Power each amended certain of their
credit arrangements, which extended the maturity dates from 2014 to 2016 and, in
the case of Mississippi Power, also revised the definition of debt to exclude
securitized debt relating to the Kemper IGCC for purposes of calculating the
debt to capitalization covenant under these credit arrangements. See Note (B) to
the Condensed Financial Statements under ''Integrated Coal Gasification Combined
Cycle'' herein for information regarding legislation related to the
securitization of certain costs of the Kemper IGCC.

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Southern Company and its subsidiaries expect to renew their credit arrangements
as needed, prior to expiration.

Most of these arrangements contain covenants that limit debt levels and
typically contain cross default provisions that are restricted only to the
indebtedness of the individual company. Southern Company and its subsidiaries
are currently in compliance with all such covenants.

The traditional operating companies may also meet short-term cash needs through
a Southern Company subsidiary organized to issue and sell commercial paper at
the request and for the benefit of each of the traditional operating companies.

Management believes that the need for working capital can be adequately met by
utilizing commercial paper programs, lines of credit, and cash.

Credit Rating Risk
Southern Company and its subsidiaries do not have any credit arrangements that
would require material changes in payment schedules or terminations as a result
of a credit rating downgrade. There are certain contracts that could require
collateral, but not accelerated payment, in the event of a credit rating change
of certain subsidiaries to BBB and Baa2, or BBB- and/or Baa3 or below. These
contracts are for physical electricity purchases and sales, fuel purchases, fuel
transportation and storage, emissions allowances, energy price risk management,
and construction of new generation.

The maximum potential collateral requirements under these contracts at September
30, 2013 were as follows:
Maximum Potential
Collateral
Credit Ratings Requirements
(in millions)
At BBB and Baa2 $ 9
At BBB- and/or Baa3 656
Below BBB- and/or Baa3 2,591
In March 2012, Mississippi Power received a $150 million interest-bearing
refundable deposit from SMEPA to be applied to the sale price for the pending
sale of an undivided interest in the Kemper IGCC. Until the acquisition is
closed, the deposit bears interest at Mississippi Power's AFUDC rate adjusted
for income taxes, which was 9.967% per annum for 2012 and 9.962% per annum at
September 30, 2013, and is refundable to SMEPA upon termination of the asset
purchase agreement related to such purchase, within 60 days of a request by
SMEPA for a full or partial refund, or within 15 days at SMEPA's discretion in
the event that Mississippi Power is assigned a senior unsecured credit rating
of BBB+ or lower by S&P or Baa1 or lower by Moody's or ceases to be rated by
either of these rating agencies. On July 18, 2013, Southern Company entered into
an agreement with SMEPA under
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which Southern Company has agreed to guarantee the obligations of Mississippi
Power with respect to any required refund of the deposit.

On May 24, 2013, S&P revised the ratings outlook for Southern Company and the
traditional operating companies from stable to negative.

On August 6, 2013, Moody's downgraded the senior unsecured debt and preferred
stock ratings of Mississippi Power to Baa1 from A3 and to Baa3 from Baa2,
respectively. Moody's maintained the stable ratings outlook for Mississippi
Power.

On August 6, 2013, Fitch affirmed the senior unsecured debt and preferred stock
ratings of Mississippi Power and revised the ratings outlook for Mississippi
Power from stable to negative.

Generally, collateral may be provided by a Southern Company guaranty, letter of
credit, or cash. Additionally, any credit rating downgrade could impact the
ability of Southern Company and its subsidiaries to access capital markets,
particularly the short-term debt market and the variable rate pollution control
revenue bond market.

Market Price Risk
The Southern Company system is exposed to market risks, primarily commodity
price risk and interest rate risk. The Southern Company system may also
occasionally have limited exposure to foreign currency exchange rates. To manage
the volatility attributable to these exposures, the applicable company nets the
exposures, where possible, to take advantage of natural offsets and enters into
various derivative transactions for the remaining exposures pursuant to the
applicable company's policies in areas such as counterparty exposure and risk
management practices. The Southern Company system's policy is that derivatives
are to be used primarily for hedging purposes and mandates strict adherence to
all applicable risk management policies. Derivative positions are monitored
using techniques including, but not limited to, market valuation, value at risk,
stress testing, and sensitivity analysis.

Due to cost-based rate regulation and other various cost recovery mechanisms,
the traditional operating companies continue to have limited exposure to market
volatility in interest rates, foreign currency, commodity fuel prices, and
prices of electricity. In addition, Southern Power's exposure to market
volatility in commodity fuel prices and prices of electricity is limited because
its long-term sales contracts shift substantially all fuel cost responsibility
to the purchaser. However, Southern Power has been and may continue to be
exposed to market volatility in energy-related commodity prices as a result of
sales of uncontracted generating capacity. To mitigate residual risks relative
to movements in electricity prices, the traditional operating companies enter
into physical fixed-price contracts for the purchase and sale of electricity
through the wholesale electricity market and, to a lesser extent, financial
hedge contracts for natural gas purchases. The traditional operating companies
continue to manage fuel-hedging programs implemented per the guidelines of their
respective state PSCs. Southern Company had no material change in market risk
exposure for the third quarter 2013 when compared to the December 31, 2012
reporting period.

The changes in fair value of energy-related derivative contracts, the majority
of which are composed of regulatory hedges, for the three and nine months ended
September 30, 2013 were as follows:
Third Quarter Year-to-Date
2013 2013
Changes Changes
Fair Value
(in millions)
Contracts outstanding at the beginning of the period,
assets (liabilities), net $ (73 ) $ (85 )
Contracts realized or settled 21 50
Current period changes(a) (21 ) (38 )
Contracts outstanding at the end of the period,
assets (liabilities), net $ (73 ) $ (73 )
(a) Current period changes also include the changes in fair value of new
contracts entered into during the period, if any.

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The changes in the fair value positions of the energy-related derivative
contracts, which are substantially all attributable to both the volume and the
price of natural gas, for the three and nine months ended September 30, 2013
were as follows:
Third Quarter Year-to-Date
2013 2013
Changes Changes
Fair Value
(in millions)
Natural gas swaps $ (1 ) $ 11
Natural gas options 1 1
Total changes $ - $ 12
The net hedge volumes of energy-related derivative contracts were as follows:
September 30, June 30, December 31,
2013 2013 2012
mmBtu Volume
(in millions)Commodity - Natural gas swaps 203 194 171
Commodity - Natural gas options 64
76 105
Total hedge volume 267 270 276
The weighted average swap contract cost above market prices was approximately
$0.27 per mmBtu as of September 30, 2013, $0.28 per mmBtu as of June 30, 2013,
and $0.39 per mmBtu as of December 31, 2012. The change in option fair value is
primarily attributable to the volatility of the market and the underlying change
in the natural gas price. The majority of the natural gas hedge gains and losses
are recovered through the traditional operating companies' fuel cost recovery
clauses.

The net fair value of energy-related derivative contracts by hedge designation
was reflected in the financial statements as follows:
September 30, December 31,
Asset (Liability) Derivatives 2013 2012
(in millions)
Regulatory hedges $ (74 ) $ (86 )
Cash flow hedges - -
Not designated 1 1
Total fair value $ (73 ) $ (85 )
Energy-related derivative contracts which are designated as regulatory hedges
relate to the traditional operating companies' fuel-hedging programs, where
gains and losses are initially recorded as regulatory liabilities and assets,
respectively, and then are included in fuel expense as they are recovered
through the fuel cost recovery clauses. Gains and losses on energy-related
derivatives that are designated as cash flow hedges are mainly used by Southern
Power to hedge anticipated purchases and sales and are initially deferred in OCI
before being recognized in income in the same period as the hedged transaction.

Gains and losses on energy-related derivative contracts that are not designated
or fail to qualify as hedges are recognized in the statements of income as
incurred.

Total net unrealized pre-tax gains (losses) recognized in the statements of
income for the three and nine months ended September 30, 2013 and 2012 were not
material.

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Southern Company uses over-the-counter contracts that are not exchange traded
but are fair valued using prices which are market observable, and thus fall into
Level 2. See Note (C) to the Condensed Financial Statements herein for further
discussion on fair value measurements. The maturities of the energy-related
derivative contracts, which are all Level 2 of the fair value hierarchy, at
September 30, 2013 were as follows:
September 30, 2013
Fair Value Measurements
Total Maturity
Fair Value Year 1 Years 2&3 Years 4&5
(in millions)
Level 1 $ - $ - $ - $ -
Level 2 (73 ) (43 ) (28 ) (2 )
Level 3 - - - -
Fair value of contracts outstanding
at end of period $ (73 ) $ (43 ) $ (28 ) $ (2 )
For additional information, see MANAGEMENT'S DISCUSSION AND ANALYSIS - FINANCIAL
CONDITION AND LIQUIDITY - "Market Price Risk" of Southern Company in Item 7 and
Note 1 under "Financial Instruments" and Note 11 to the financial statements of
Southern Company in Item 8 of the Form 10-K and Note (H) to the Condensed
Financial Statements herein.

Financing Activities
During the first nine months of 2013, Southern Company issued approximately 6.6
million shares of common stock for approximately $206 million through the
employee and director stock plans, of which 0.7 million shares related to
Southern Company's performance share plan. In July 2012, Southern Company
announced a program to repurchase shares to partially offset the incremental
shares issued under its employee and director stock plans. There were no
repurchases under this program in the first nine months of 2013 and no further
repurchases under the program are anticipated.

During the first seven months of 2013, all sales under the Southern Investment
Plan and the employee savings plan were funded with shares acquired on the open
market by the independent plan administrators. Beginning in August 2013,
Southern Company began using shares held in treasury to satisfy the requirements
under the Southern Investment Plan and the employee savings plan. During the
third quarter 2013, Southern Company issued approximately 2.0 million shares of
common stock previously held in treasury for approximately $80.9 million to
satisfy the requirements under the Southern Investment Plan and the employee
savings plan.

In addition, during the three months ended September 30, 2013, Southern Company
issued approximately 5.4 million shares of common stock through at-the-market
issuances pursuant to sales agency agreements related to Southern Company's
continuous equity offering program and received cash proceeds of approximately
$222.2 million, net of $1.9 million in fees and commissions.

In August 2013, Southern Company issued $500 million aggregate principal amount
of Series 2013A 2.45% Senior Notes due September 1, 2018. The proceeds were used
to pay a portion of Southern Company's outstanding short-term indebtedness and
for other general corporate purposes.

Southern Company's subsidiaries used the proceeds of the debt issuances shown in
the table above for their respective redemptions and maturities shown in the
table above, to repay short-term indebtedness, and for general corporate
purposes, including their respective continuous construction programs.

In March 2013, Georgia Power entered into three 60-day floating rate bank loans
bearing interest based on one-month LIBOR. Each of these short-term loans was
for $100 million aggregate principal amount and the proceeds were used for
working capital and other general corporate purposes, including Georgia Power's
continuous construction program. These bank loans were repaid at maturity.

In June 2013, Gulf Power entered into a 90-day floating rate bank loan bearing
interest based on one-month LIBOR. This short-term loan was for $125 million
aggregate principal amount and the proceeds were used for working capital and
other general corporate purposes, including Gulf Power's continuous construction
program. This bank loan was repaid in July 2013.

Gulf Power purchased and held $42 million aggregate principal amount of
Development Authority of Monroe County (Georgia) Pollution Control Revenue Bonds
(Gulf Power Company Plant Scherer Project), First Series 2002 (First Series 2002
Bonds) and $21 million aggregate principal amount of Development Authority of
Monroe County (Georgia) Pollution Control Revenue Bonds (Gulf Power Company
Plant Scherer Project), First Series 2010 (First Series 2010 Bonds) in May 2013
and June 2013, respectively. In June 2013, Gulf Power reoffered the First Series
2002 Bonds and the First Series 2010 Bonds to the public.

In June 2013, Gulf Power issued 500,000 shares of Series 2013A 5.60% Preference
Stock and realized proceeds of $50 million. The proceeds from the sale of the
Preference Stock, together with the proceeds from the issuance of the $90
million aggregate principal amount of Gulf Power's Series 2013A 5.00% Senior
Notes reflected in the table above, were used to repay at maturity $60 million
aggregate principal amount of Gulf Power's Series G 4.35% Senior Notes due July
15, 2013, to repay a portion of a 90-day floating rate bank loan in an aggregate
principal amount outstanding of $125 million, for a portion of the redemption in
July 2013 of $30 million aggregate principal amount outstanding of Gulf Power's
Series H 5.25% Senior Notes due July 15, 2033, and for general corporate
purposes, including Gulf Power's continuous construction program.

In September 2013, Mississippi Power entered into a nitrogen supply agreement
for the air separation unit of the Kemper IGCC, which resulted in a capital
lease obligation at inception of $83 million with an annual interest rate of
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4.9%.

Subsequent to September 30, 2013, Georgia Power announced the redemption in
November 2013 of $100 million aggregate principal amount of its Series 2008C
8.20% Senior Notes due November 1, 2048 and reclassified the outstanding
principal balance to securities due within one year at September 30, 2013.

Also subsequent to September 30, 2013, Georgia Power announced the redemptions
in November 2013 of $55 million aggregate principal amount of Development
Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia
Power Company Plant Vogtle Project), Third Series 1994 and $49.6 million
aggregate principal amount of Development Authority of Burke County (Georgia)
Pollution Control Revenue Bonds (Georgia Power Company Plant Vogtle Project),
First Series 1997, which were issued for the benefit of Georgia Power.

In addition to any financings that may be necessary to meet capital requirements
and contractual obligations, Southern Company and its subsidiaries plan to
continue, when economically feasible, a program to retire higher-cost securities
and replace these obligations with lower-cost capital if market conditions
permit.